Dogecoin Tests Key Support as Analyst Eyes Rally to $0.50

Dogecoin is currently navigating a critical juncture, holding the 23.60% Fibonacci support level at $0.1869 after experiencing a 14% decline over the past week. As the largest meme coin by market capitalization grapples with broader altcoin weakness, traders are keenly observing whether this key Fibonacci level will hold or give way.

Currently trading around $0.19, Dogecoin's price is at a level that has historically attracted buying interest during previous corrections. Recent weekend price action displayed long-tailed candles, suggesting buyers are stepping in around these levels. However, the sustainability of this support remains uncertain, given the deteriorating technical indicators.

Dogecoin's recent price action also reveals a failed attempt to surpass long-standing resistance near the 50% Fibonacci level at the psychological $0.25 mark. This bearish reversal has triggered a cascade of technical breakdowns, pushing DOGE below the 200-day, 100-day, and 50-day EMAs.

Technical indicators are signaling increasing downward pressure. The MACD and signal lines have formed a bearish crossover, moving closer to the center line, which indicates growing bearish momentum. A steeper correction becomes more probable as these indicators continue their downward trajectory. The decline in the 50-day and 100-day EMAs has also stalled any potential bullish crossover that might have signaled a trend reversal. This EMA setup typically creates overhead resistance, making any recovery attempts more challenging.

However, if Dogecoin manages to recover from the current 23.60% Fibonacci support, a potential cup-and-handle pattern remains a possibility. For this bullish scenario to materialize, DOGE would need to break above the long-standing resistance trendline and retest the $0.25 supply zone. A successful breakout could initiate a rally, with the 78.60% Fibonacci level at $0.3618 as the initial target. Conversely, a daily close below $0.1869 would likely lead to a continued slide towards the next significant support level at $0.14.

Cryptocurrency analyst Tardigrade has observed a breakout from a base-three pattern within a step-like parabolic curve formation, suggesting that Dogecoin may be poised for a new bullish phase. According to the analyst, DOGE has left Base 3 and is aiming for the high of Base 4 .

This projection could potentially push Dogecoin above the $0.50 psychological level, representing a substantial rally from its current price near $0.19. The base-three pattern implies accumulation phases followed by explosive upward movements, although the success of this pattern depends on maintaining current support levels.